AOL CEO: 86 percent of commerce is local, but 100 percent of our lives is local

AOL and Huffington Post-branded cookies were served at a luncheon Friday headlined by AOL CEO Tim Armstrong and AOL Huffington Post Media Group president, EIC Arianna Huffington. AOL bought The Huffington Post in a $315 m deal in February.

WASHINGTON — Five months after the $315 million merger of AOL and HuffingtonPost.com, AOL’s CEO and Chairman Tim Armstrong, and Arianna Huffington, AOL Huffington Post Media Group president and editor in chief, spoke at the National Press Club Friday about the AOL-Huffington Post merger and the future of news on a grand, digital scale.

At the time of the merger, the companies claimed they would have a combined base of 117 million unique visitors per month and 270 million worldwide.

Huffington said Friday 1,300 journalists are on the media group’s payroll, and since the merger the company added 160 journalists. She said Armstrong has a quota of bloggers to bring to the site. She did not say how many.

She added that Patch.com sites have 7,000 bloggers at the local level and are about to hit 1 million comments. She said new media and social media “all about engagement.”

For local news efforts, AOL’s Patch.com, which Huffington is directing, has expanded to 859 sites and the two company heads said they foresee more expansion into local markets in the future. The Huffington Post recently launched a UK edition. The company also has set up 33 Patch.com sites in US presidential primary election states, according to Huffington.

Arianna Huffington, left, and Tim Armstrong, far right, talk to attendees post-event. The two were featured guests at National Press Club luncheon on July 15 in Washington, DC, to discuss the future of the news.

The rapid corporate news growth has prompted a response from a collection of independent community news publishers who argue local news environments are trending toward a highly specialized, one-on-one, scaled-down approach to journalism and advertising. (Note: many of these publishers are part of the Block by Block community.)

Armstrong stated that in business model of future of online journalism “free will be big” yet there is room for paid, and “a journalist is not a single entity, a journalist is a network.”

Below are Armstrong’s views on what he sees are major factors in online information’s direction and why it will be sustainable.

Human needs’ state: With smartphone growth hitting 5 billion mark, people are going to be connected to information full time. Information is powerful and AOL stands ready to deliver it and Armstrong says consumers will want more, better information. “They are going to want from people who know about the information that they need.”

Connecting offline with online: Human needs’ state will dictate the importance of online influences on physical changes in people’s lives. How people live their lives offine is most important, he said.

Betting big on local: “Because that’s where people live their lives. One of the ine…There is a giant white space created by changes in the media landscape.”

“86 percent of commerce gets done locally but 100 percent of people’s lives live locally and their families are local and there has been a giant whitespace created by the changes that have happened in the media landscape, and I think local is something that is important. It’s important for patch, it’s important to Huffington Post, but most importantly its important to all of us. Where you live is a key aspect of the future.” — Tim Armstrong, AOL CEO

Brands matter — a lot: Majority of users online use less than 30 websites, about 50 percent of users regularly visit 10-14 sites, Armstrong said; people are starting to use brands for how they get information. “I think consumers are going to demand the best highest brands in the information and journalism space and the companies that do that best are going to be the most successful. That’s the opposite of what a lot in the investment community thinks.” He added AOL will be trimming its site portfolio.

Journalists need technology: Armstrong said there is a big fear from journalists around technology, and that’s wrong. There is a need for journalist desktops, and journalist transparency – where does the journalist stand? Where is this person coming from?

The company also is aggressively embracing citizen journalism. Huffington said since a cit-j initiative was launched last week, 600 people signed up in the first 48 hours to contribute, and that they have “1,300 professional journalists want to work with us” and the company is accommodating contribution through its platform.

Huffington also declared the future of journalism is “hybrid” – professional journos with the best understanding on how to break a story, stay on a story presented on a platform for users to contribute. And the most important driver of content is the desire to “bear witness” of events and daily life, she said. Essentially, AOL and Huffinton Post are betting that we all want to share what we experience and they are ready to provide the means to it, globally.

Armstrong listed competition threats as mainly “internal.”

“No one is putting as big an investment as were are and we have an opportunity to lose.” — AOL CEO and Chairman Tim Armstrong.

He also said the human needs’ state poses its own challenge: “How do we fulfill real needs for real people every day?”.